The first corporate university was established in the United States by General Motors as the GM Institute in 1927 (Nixon and Helms, 2002). Examples of high profile corporate universities are McDonald's Hamburger University and Disney University. Some of these corporate universities have operational size and scale equal to large traditional universities. At its peak Motorola’s corporate university, for example, offered accredited degrees and had 400 full‑time staff and 800 part-time teachers in 19 countries and delivered programs to over 100,000 students a year (Bedar, 1999).

The concept of corporate universities was not limited to the United States. In Europe, BAE Systems provided programs for around 50,000 employees during the first three years operation of its in-house corporate university. German corporations, including Daimler Chrysler, Deutsche Bank and Lufthansa also initiated corporate universities (Andresen and Irmer, 1999). In Australia, the first corporate university was the Coles Institute formed as a partnership between Coles Supermarkets and Deakin University in 1999 (Healy, 1999).

The amount organisations spend on employee training and development is also increasing. Most organisations spend between three and six percent of payroll on employee development, with an average expenditure around four per cent of payroll on employee development (Shah, Sterrett, Chesser and Wilmore, 2001).

As organisations increase their involvement in providing education programs for employees, many form partnerships with accredited universities in order to provide university awards, or pathways to achieve university degrees, to complement their in-house corporate education programs.

Definition: Corporate University
Definitions of corporate universities usually centre on the theme of company sponsored in-house business education programs linked to the achievement of corporate objectives. Programs range from basic training to high level post-graduate qualifications.

Meister (1998, p.1) provides an early definition of a corporate university as "a centralised in-house training and education facility to address the shortened shelf life of knowledge and to align training and development with business strategies". Plompen (2005, p.83) defines a corporate university as “the overall organisational umbrella for aligning and co-ordinating all learning for employees in order to achieve the organisation’s goals.” Lewis (2005) describes a corporate university as a means for an organisation to offer continuous education for employees tailored to an organisation’s corporate objectives. Kent (2005) observes that training departments are primarily focused on individual development using programs on an ad hoc basis, whereas corporate university programs have an organisational development role in response to a detailed assessment of the emerging and future needs of an organisation.

According to Gallagher (2000), some organisations use the term ‘corporate university’ as a marketing tool for promotion instead of demonstrating a genuine commitment to employee development through corporate education. Dealtry (2001a) also finds the term ‘corporate university’ being used as a label for training and development units or an enhanced human resources function within certain organisations. According to Dealtry, the purpose of a corporate university should be to promote innovation in thinking, real world competencies and problem solving skills by utilising the programs and services of universities and higher education providers, where appropriate, in a networked and integrated manner. Garfoot (2003) suggests the major point of difference between a corporate university and other corporate education initiatives is that a corporate university is driven by corporate objectives, such as the need for cultural change, or to integrate disparate business units within the corporation.

Eccles (2004) claims a best practice corporate university comprises comprehensive learning infrastructure where employee learning is aligned with an organisation’s business strategy. The priority of a corporate university is to develop individual and organisational competencies by delivering corporate education programs using a blended model of face-to-face and online learning technologies to employees at all levels of an organisation, where learning and development is viewed as a continuous process. Eccles view is consistent with Meister (2000) and Frazee (2002) that training departments are reactive and decentralised, with a primary role of providing standardised functional information, whereas a corporate university is proactive, centralised and has a customised, strategically relevant curriculum for key job clusters. A corporate university also contributes to shaping the culture of an organisation and fostering the development of intangible skills such as leadership, creative thinking and problem-solving (Meister, 2000)

A feature of corporate universities is the formal education formats offered by organisations to help employees perform better in managing the growing complexity and technical requirements of their jobs (Shah, Sterrett, Chesser and Wilmore, 2001). They also find people want to learn valuable skills that could help them to attain promotion and additional responsibilities with their employer, or have portability of qualifications if they change employers.

Corporate universities are also referred to as corporate education and training centres, leadership centres, management institutes or education academies, depending on the organisation (Nixon et al, 2002). Densford (1998b) observes that some organisations avoid using the term corporate university as it has too many negative connotations in their commercial context that are associated with traditional universities. Walton (2005) suggests the term corporate university is aspirational in nature and has symbolic connotations to assist in positioning the learning activities as valuable to an organisation, rather than an attempt to replicate the practices or values of a traditional university.

Arnone (1998) finds the number of corporate universities has increased significantly since the late 1980s as leading organisations in the computer and high technology industries developed formal education and training initiatives they called corporate universities. At the time, these industries were in high growth phases, facing increasing competition in a global marketplace, and corporate education programs were seen as a means of being able to provide intensive, company specific education and training to large numbers of employees in order to strengthen the competitive advantage of the organisation.

Demographic changes also influenced the expansion of corporate universities. For example, in the United States a projected 70 million Baby Boomers are expected to retire from the workforce over the 17 years to 2020, while only 40 million workers are expected to enter the workforce in that period. Gordon (2003) recommends high wage countries like the United States need to utilise corporate universities as a means of developing a well-educated workforce of knowledge workers so they can provide for future employment requirements.

Rademakers (2005) suggests corporate universities are part of the “third wave” of societal and economic development. The first wave related to the agricultural revolution and transformed the hunting and gathering societies. This was followed by the industrial revolution as the second wave. The third wave, according to Rademakers, began in the early 1950s with the transformation of industrialised economies into knowledge and information driven economies. This shift to developing knowledge as a means of industrial competitive strength prompted organisations to influence corporate education through the development of in-house corporate universities. Rademakers claims industry competitive advantage is derived from the innovation of new products, services, processes, organisational systems and markets, with the knowledge and insight for this innovation generated through interaction within and between organisations, with a corporate university facilitating interaction and knowledge sharing within an organisation.

Each corporate university is as unique as their parent organisation, with the role and structure of each corporate university determined by the resources allocated to them, the learning objectives and the culture of the organisation (Kent, 2005).

Densford (1998a) finds the main reasons for organisations establishing corporate universities in the United States are:

• 84 percent to link education and training to strategic business goals;
• 61 percent to drive change within organisations;
• 59 percent to elevate the importance of education within the organisation; and
• 48 percent to coordinate all training and education programs in a single area.

A factor that influences many organisations to establish corporate universities is globalisation, which stimulates demand for standardised products, services and technical infrastructure and requires organisations to provide consistency in the training of their employees (Cunningham, Ryan, Stedman, Tapsall, Bagdon, Flew and Coaldrake, 2000). Globalisation also leads to increasing competition in industries and prompts organisations to differentiate themselves from competitors through the knowledge and skills of their employees (Schugurensky, 2000).

A shortage of skilled workers in some industries increases the level of competition among organisations to attract and retain suitable employees. Labi (2000) notes that substantial investment by organisations in quality corporate education programs enhances staff retention rates and contributes to increased financial dividends for the organisations. Morin and Renaud (2004) suggest that for many organisations facing projected shortages of skilled workers, maintaining a corporate university may be the most cost-effective solution for attracting and keeping skilled employees.

The main driver in the development and expansion of corporate universities is the ability of organisations to transfer learning by their staff into immediate business benefits, with the ultimate goal of any corporate training program to increase shareholder value by upgrading the skills and abilities of employees (Madden, 2005). Dealtry (2000a) also finds most corporate universities are established to support the strategic missions of their parent organisations by providing a holistic approach to the learning and development of employees, which involves blending education and training with real business situations. Cave (2001, p19) claims the increasing number of corporate universities is driven mainly by the financial bottom line: “companies are finally recognising executive development has a measurable financial benefit.”

The growth of corporate universities is most prevalent in the post-industrial industries: financial services, healthcare, telecommunications, utilities, entertainment and retailing (Waks, 2002). Furthermore, Fulmer and Gibbs (1998) estimate that over 75 percent of funds invested by organisations in executive and corporate education programs are spent on customised programs, rather than standard public programs offered by universities and higher education providers. In many cases, corporate universities have been developed to fill a gap where the demand for company-specific training and development has not been met by the supply of education programs delivered by traditional universities (Blass, 2005).

Holland and Pyman (2006, p.2) claim that corporate universities are not just a business fad but “an overarching designation for formal learning and knowledge creation activities and processes in an organisation.” There is also a significant change of attitude occurring among many organisations, particularly in the United States, that providing ongoing education and training for employees is no longer a cost but an investment to attract and retain the best workforce (Meister, 2001). Meister identifies a number of drivers for the establishment of corporate universities as a means by which organisations can:

1. prepare employees to compete in a global economy;
2. meet and exceed service expectations with customers;
3. assist employees to adjust to changing roles and new technologies; and 
4. respond to current and future global pressures.

Prince (2000) finds the main drivers for establishing corporate universities in the United Kingdom are:

• the need for the learning and development of employees to be strategic, with organisations increasingly needing staff educated to think and act independently and able to apply the latest in management thinking;
• a means of changing the behaviours of managers, by using corporate education programs that encourage managers to discuss issues and generate ideas in a rational and logical manner;
• an incentive to retain good employees, with an emphasis on retaining, retraining and rewarding good staff.

Paton, Peters, Storey and Taylor (2005) find the rise in corporate universities coincides with four major developments taking place in industry and society:

1. the emergence of the knowledge economy and the concept of learning organisations, where organisations have started to harness the collective skills and knowledge of their employees to assist in developing new ideas, products and processes to achieve an edge over competitors;
2. the frequency and rapid rate of corporate restructuring, due to mergers and acquisitions, globalisation and increasing competition, is leading managers to draw on common corporate principles and practices to achieve corporate cohesion and reinforce corporate priorities, culture and values;
3. the pervasiveness and potency of information and telecommunications technologies and their use in training and development, such as online or e‑learning;
4. the increasing diversity of educational systems, that allows greater flexibility in vocational and educational programs with progression through multiple pathways and more work-role centred learning.

The Purpose of a Corporate University
Fresina (1997) provides one of the first definitions of the purpose of a corporate university: to reinforce and perpetuate an organisation’s values and goals, to manage change within an organisation and to drive and shape the future direction of an organisation. Fresina uses Disney’s corporate university to demonstrate the role a corporate university has with inducting new employees into an organisation, reinforcing the primary purpose and values of the organisation and striving to perpetuate those attributes that have been integral to the success of the organisation.

The second purpose of a corporate university, according to Fresina, is to manage the change process in an organisation by providing employees with the opportunity to discuss processes, perspectives and beliefs that management identify as being outdated. Once the outmoded beliefs and practices are explored with employees, the corporate university then introduces new practices that management regard as more appropriate for the future of the organisation. By understanding the context of an issue, employees understand why certain practices are outmoded and then they are more likely to embrace the new.

The third purpose of a corporate university is to drive change and shape the future direction and development of an organisation. Fresina (1997) admits this is rare as it involves the management of an organisation providing the necessary resources and support for their corporate university with a belief the solution to the future of the organisation can best be discovered by harnessing the collective knowledge and wisdom of the management team through the structure and environment of their corporate university. Fresina comments that this type of corporate university is constantly exploring new contexts and future possibilities, and leaders participating in the programs vigorously investigate the ambiguous, uncomfortable and unknown to ascertain its relevance and implications on the future of an organisation.  Fresina refers to Motorola as an example of this type of corporate university, where the Six Sigma concept of quality measurement and improvement was devised and has since been adopted as a benchmark for quality, especially in organisations with high volume standard processing.

The 1999 Survey of Corporate University Future Directions (AACSB, 1999) identifies five core activities of a corporate university, in order:

• to enhance employee performance and productivity;
• to raise the level of importance of education within the organisation by providing a formal learning process;
• to communicate the corporate vision and philosophy to employees;
• to establish uniformity and consistency of education and training programs throughout the organisation; and 
• to support change in corporate culture across the organisation.

Meister (2000) comments that organisations are increasingly recognising the importance of their intellectual capital as a means of generating new initiatives and developing a competitive edge, which reflects the rising number of corporate universities as organisations seek to systematise and develop their capabilities through the learning and development of their employees. Dealtry (2003) also points out that learning is not an event that takes place at an early stage in the career of an employee; instead for the serious career minded learner the process continues over a period of 35-to-45 years and increasingly organisations are involved in managing the learning of their employees.

Gerbman (2000) describes the role of a corporate university is to promote learning and cultivate a sense of an organisation’s vision to their employees, as well as facilitate change to assist the organisation achieve its goals. Anderson (2002a), however, is critical that corporate universities are merely used to indoctrinate employees with an organisation’s rhetoric. The teaching is usually focused on the way the organisation operates and provides no opportunity for students to be exposed to a broader view and wider diversity of fellow students, which their peers in business schools experience. Morrison and Meister (2000) claim that corporate training departments are reactionary, fragmented and decentralised whereas corporate universities provide strategically relevant education and training for each type of job cluster in an organisation and could be extended beyond employees to also include customers and suppliers.

Very few corporate universities offer, or even aspire to offer, degree programs due to the difficulty in obtaining accreditation of their in-house programs and the costs associated with maintaining such accreditation.

The role of corporate universities appears to be as diverse as the organisations in which they are established, and range from ‘boot camp’ style formats for the elite training of senior managers, through to comprehensive in-house adult education learning centres available for all employees (Hilse and Nicolai, 2004). Paton, Peters, Storey and Taylor (2005) also find that no two corporate universities are the same and introduce the term strategic learning initiatives, rather than corporate education programs, to reflect the flexible role of corporate universities. Rademakers (2005) observes that not only is each corporate university as inherently unique as the organisation in which it is established but they usually have idiosyncrasies consistent with the organisation.

Arnone (1998) identifies the following reasons as the motivation for organisations to establish corporate universities:

• to reduce the waste of money and resources on duplication from similar education programs being taught by different departments or on courses being taught internally to one group while another group attends a similar course externally;
• to facilitate cross-functional collaboration among employees from different functional areas of an organisation by having them learning, discussing and sharing perspectives on issues with others within the organisation;
• to have education and training outcomes linked to the organisation’s strategic goals so the true value of the education programs is more easily measured;
• to continually adjust and evolve the education programs to meet the corporate mission and goals;
• to have a stronger focus on practical examples, real work issues and experiential activities through corporate university programs in contrast to those provided by traditional universities.

Shah, Sterrett, Chesser and Wilmore (2001) find the growth of corporate universities as a means for organisations to attract and retain good employees in a tight labour market. They find people are seeking more meaning in their work and corporate universities provide education programs to develop their skills, qualifications and employability, both within the organisation and with other organisations should circumstances change. Some organisations have their programs accredited by universities so employees can receive credit for their in-house courses with university graduate programs (Shah et al, 2001).

The most effective corporate universities are those with a primary role to assist their parent organisation achieve its corporate goals. Having a corporate university should not be viewed as the goal of an organisation but as a means of helping to achieve the corporate goals (Allen, 2002). A corporate university should not duplicate or overlap with the role of a traditional university and it should not mislead participants’ expectations about the nature and quality of the in-house education programs relative to those offered by a traditional university (Dealtry, 2001a).

Blass (2005) investigates the role of corporate universities in the context of the learning organisation and finds a diverse range of functions. These include: facilitating an increased rate of learning within an organisation to match the increased rate of change in the business environment, assisting an organisation to respond to the challenges of globalisation,  aligning learning strategies with the business goals of an organisation, centrally directing and coordinating the education and training activities of an organisation, maintaining and evolving a corporate culture even when an organisation has diverse cultures through its global operations, and harnessing the learning and knowledge of employees to create and sustain a competitive advantage for the organisation.

Jansink, Kwakman and Streumer (2005) identify a series of characteristics for corporate universities with an emphasis on productive knowledge, including: having learning aligned with the goals of the organisation, knowledge transfer from education programs to workplace applications, knowledge sharing among program participants and knowledge creation as an integral part of the corporate education programs. They recommend that corporate universities need to provide a broad range of learning activities with an emphasis on learning-by-doing. Jansink et al also find employees should have ownership of their learning and learning goals, the programs should be available to employees at all levels of the organisation and the programs should integrate learning and working by using case studies from day-to-day practice.

While corporate universities have been growing in popularity, El-Tannir (2002) finds their shortcomings include:

• a lack of breadth in subjects and learning compared to a traditional university;
• a lack of degree accreditation and universal recognition of their programs;
• a lack of depth of scientific research usually conducted in a university academic environment;
• learning delivery is usually required in a constricted timeframe;
• participants do not have the same opportunities to experiment in a non‑threatening classroom environment; and 
• there is not the same opportunity for freedom of speech in a corporate university compared to a traditional university.

Bersin (2005) suggests the corporate university, as a physical entity, is in decline and corporate learning services are growing. Bersin describes corporate learning services as centrally located education service units within organisations that coordinate on-demand education and training programs relevant to employees’ jobs. The corporate education service units are able to constantly evolve in response to changing corporate education and training priorities. According to Bersin, an important role of corporate learning services is the coordination of education and training courses and content for delivery anywhere at anytime across the breadth of an organisation.


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